Information Technology development

North America accounts for nearly 60 per cent of India's IT export basket. Coinciding with a turnaround in business sentiments in its largest market, top-tier IT companies such as Infosys, Wipro and HCL Technologies appear to be aggressively ramping up North America-based delivery capabilities. While Infosys Technologies has bought McCamish Systems based in Atlanta, Georgia, HCL Technologies has completed the acquisition and upgradation of a data centre in Parsippany, New Jersey. Additionally, Cognizant has announced the expansion of two of its delivery centers in Phoenix (Arizona) and more recently in Toronto, Canada.

Forrester recently predicted that the US tech market will start to recover from downturn in the fourth quarter of 2009, and that the global tech market will follow suit next year.

Recent Developments

HCL Technologies' New Jersey centre enables delivery of data centre services, including near-shore co-location solutions, business continuity planning, cloud computing and mainframe management.
For Cognizant, the operational expansion of Phoenix delivery centre was primarily to add BPO services to the existing roster of application development, application maintenance, testing and related services. It will hire over 100 full-time professionals at the Phoenix delivery centre over 12 months and take the overall headcount at that centre to over 400.
India’s fifth-largest IT Company, HCL Technologies has announced a five-year deal with media conglomerate News Corp for managing its data centres and IT across UK newspapers like The Times, the Sun and The Sunday Times.
IBM India with regional headquarters in Bangalore and offices in 14 cities, including regional offices in New Delhi, Mumbai, Kolkata and Chennai, plans to scale up its business process outsourcing (BPO) operations in the country and would recruit 5,000 people to support the expansion. IBM India has recently bagged contracts in services sector from domestic companies such as state-run Telecommunications Consultants India Limited, Sardar Bhiladwala Pardi People's Cooperative Bank in Gujarat and Madhav Nagrik Sahakari Cooperative Bank in Rajasthan
Digicable, a major cable and broadband distribution player in India, has signed a 10-year strategic outsourcing agreement with IBM at an initial outlay of Rs 380 crore (US$ 83 million). This is one of the most significant deals signed by a media and entertainment company in India.
Walmart has selected three IT vendors in India—Infosys Technologies , Cognizant Technology Solutions and UST Global—for multi-year contracts worth over US$ 600 million (around Rs 2,750 crore). This development is expected to boost the IT outsourcing landscape in India, given that Walmart typically prefers to develop its retail applications in-house.
Chip maker Intel has launched a concept version of 48 core Intel processor—‘Single-chip Cloud Computer (SCC), an experimental prototype designed as a concept vehicle for parallel software research. A team of about 15 engineers from its lab in Bangalore contributed in terms of circuit/physical design of the IA (Intel architecture) core, memory controller logic and mesh interconnect network.
As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with Tribal Development Department of Gujarat for a development project aimed at upliftment of tribals in Sasan area of Gir forest. IBM will help the government department scout appropriate private sector partner for setting up a theme resort at Sasan.
In a move to strengthen its capabilities in business analytics and optimization segment of the IT industry, the US$ 104-billion IBM Corporation has announced the creation of a new Business Analytics Centre of Competency in Bangalore. The proposed Bangalore centre will also support IBM’s network of global Business Analytics Solutions Centres in Berlin, Beijing, New York and Tokyo, soon to be joined by Washington DC and London.
IBM unveiled the Lotus Center for Advanced Collaboration (LCAC), at the IBM Software Lab in Pune. Positioned as a regional hub for Lotus Advanced collaboration strategy and solutions, the centre, the only one of its kind in Asia-Pacific, will host dedicated technical expertise to help customers and partners adopt collaboration technology in their environment.

Road ahead

In the Union Budget presented in July, the Government had extended the sunset clause for the Income Tax holiday under Section 10A/B by one year, allowing the IT companies a breather till March 2011.

Besides the tax holiday, STP scheme also allows other benefits such as a single-window clearance and 100 per cent Customs duty exemption on imports of capital equipment among others.

The Indian and German governments have agreed to promote a new bilateral technical cooperation initiative to support the introduction of high quality eGovernance and eBusiness services in the IT-SMEs (small and medium-sized enterprises) sector. The project “Economic Development though eGovernance” is jointly promoted by the Directorate for Standardization, Testing and Quality Certification (STQC) of the Ministry of Communication and Information Technology (MCIT) and GTZ. The objective of this project is to improve the competitiveness of IT-SMEs through the use of eGovernance , eBusiness and ICT services.

The spending on IT in India will touch US$ 22.6 billion in 2009 and is expected to grow to US$ 37.6 billion by 2013, as per a study by IT research firm International Data Corporation (IDC) and Microsoft Corp. In addition, IT as a percentage of GDP will increase from 1.8 per cent to 2.3 per cent, as per the study.

The report said the IT market would drive the creation of nearly 7,000 new businesses and 3,24,000 jobs between the end of 2009 and the end of 2013. Most new companies will be small and locally owned. The study applies IDC’s Economic Impact Model, which assesses the IT industry’s effect on job creation, company formation, local IT spending and tax revenues in addition to assessing Microsoft’s partner ecosystem. The study’s spending figures accounted for hardware, software, services and data networking expenditures by consumers, businesses, governments and educational institutions within each country.

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Information Technology development

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